8990 Holdings invests P66-B for housing projects

Mass housing developer 8990 Holdings, Inc. is planning to launch 66,000 units worth P66 billion nationwide over the next five years as it plans to ramp up its expansion with funds raised from its planned P9 billion follow-on offering.

In an interview during the offering roadshow, 8990 president Jesus Atencio said this will comprise 18 projects which will be built on a total of 250-hectare company-owned property.

“We feel that our 250-hectare landbank today will give us a window of three to four years. We want another 250 hectares for eight years,” Atencio said adding that they intend to buy the land since “we are not into joint ventures.”

For 2014 alone, Atencio said the firm is launching 8,000 to 9,000 housing units from which he said they will earn a “conservative” P3.2 billion based on their return-on-investment ration of about 40 to 45 percent.

A total of 16 projects will be launched in 2014 and 2015 in Davao, Cebu, Cavite, Metro Manila, Iloilo, and Rizal. In 2018, 8990 will launch project in Quezon City and another project in Iloilo in 2019.

While most of its projects are single-detached socialized or affordable housing units, Atencio said they will also be putting up medium-rise buildings, mostly in the National Capital Region where land is more expensive.

The firm has priced its P9 billion follow-on equity offering at P6.50 per share after getting overwhelming demand from global investors.

For only the second time in the Philippines, a formal cornerstone tranche was executed where two global long-term institutional investors, Khazanah Nasional Berhad and TPG Capital (S) Pte. Ltd., committed to subscribe and were allocated over P2.9 billion worth of shares each at the top end of the price range prior to the launch of the bookbuilding exercise.

This is the first investment of both Khazanah and TPG in the Philippines. The offering was priced at the very top of the P5.50 to P6.50 range, with participation from a large number of institutional accounts.

“We are extremely pleased with the strong level of interest that we have received from the global investor community, and we welcome them as our shareholders,” said Atencio.

The largest mass housing developer in the Philippines, 8990 has sold over 26,000 units since 2003, with approximately 13,000 additional units available for development and sale from ongoing projects.

The company, through its “DECA Homes” and “Urban DECA Homes” brands, have gained a strong reputation in the market of providing quality and affordable homes to consumers in the fast-growing Philippine Mass Housing market.